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Prokhorov reassures investors as he focuses on politics

29.10.2012

Russian billionaire Mikhail Prokhorov's assets will continue to be well managed by his partners after his announcement that he is stepping back from his businesses in order to dedicate himself to politics, his spokeswoman said on Sunday.

Prokhorov, who challenged Vladimir Putin in last year's presidential elections, said on Saturday that he will hand over the management of his business assets to partners and focus on politics.

With a fortune estimated by Forbes magazine at $13 billion, Prokhorov's interests include a stake in aluminium giant Rusal , the U.S. Brooklyn Nets basketball team and the Yo-Mobile hybrid car project. His Onexim group owns 38 percent of the country's largest gold miner, Polyus Gold.

In practice, the announcement has no impact on the ownership or management structure of the assets, Prokhorov's spokeswoman said on Sunday.

She added that last year, he made a similar decision when he was involved in running a political party and during his presidential bid. Last year, Prokhorov stepped down as CEO of Polyus and left the post of Onexim's president.

Prokhorov ran on a liberal ticket and placed third in the presidential election won by Vladimir Putin in March. He collected almost 8 percent of the vote.

Prokhorov told journalists at a convention on Saturday that he signed a trust agreement under which his Onexim business partners would manage all his businesses, according to Russian media reports. Onexim's CEO is Dmitry Razumov, who is also on the Rusal board.

"From this day I will only engage in political activity and nothing else," Prokhorov told his supporters. He became chairman of the party Civic Platform on Saturday, according to its website.

The statement is a sign of his commitment to his role as a public and political figure, his spokeswoman said.

Prokhorov does not hold any management positions at the companies in which he is a shareholder.

"The ownership (of his assets) doesn't change at all," the spokeswoman said, who declined to comment on the percentage of Onexim he directly owns. As before, he will not be involved with day-to-day decision making, which is handled by his management team, she said.

In terms of the Brooklyn Nets, Prokhorov has never been a day-to-day manager of the team but remains a committed owner and fan, she added.

Bruce Bower, a portfolio manager at Moscow-based fund manager Verno Capital, said that Prokhorov has been for the past several years "mostly a financial investor and not an operator," so his status would not change much in that respect.

"His political ambitions have not been a secret - he has made them clear over the past few years," said Bower. "Obviously, this announcement was something he had been thinking for a while and it's just another step forward in his political ambitions."

Onexim could potentially sell its stake in Polyus at some point. In September, Polyus Gold said that Onexim was in talks with two potential buyers to sell its near-$4 billion stake in Polyus.